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Legend has it that the famous sociologist Erving Goffman’s last words were “we should have studied the rich.”  Whether or not he actually voiced that sentiment, the fact is that since his death in 1982 there have been a number of anthropologists and sociologists who have committed themselves to “studying up.”  One of them is Karen Ho and her amazing ethnography of Wall Street, Liquidated, is one excellent reason why learning more about those who literally control the world that you and I live in is important.  

Ho begins her story as a graduate student at Princeton in 1995 who decides that she wants to study the culture of Wall Street from the inside.  She works the recruitment process, lands a job at BT (Bankers Trust), lives and works with the natives, and then suddenly finds herself “downsized.”  She returns to Princeton and begins what turns into a ten-year field study conducted primarily through interviews and observations, reading deep histories of finance and investment banking, and constructing a book that explains how and why those who we entrust with our financial future shouldn’t be trusted at all.  In fact, they should be loathed.

I am generally a calm reader.  But somewhere in the third chapter of this fine and detailed ethnographic study, I became unglued to the point of rising up from my comfortable reading chair and cursing Wall Street.  Why?  

In part it was an accumulating realization that Wall Street is an insular and entirely undemocratic society made up of aggressive, nerdy (white) people who graduated from one of four schools (Princeton, Harvard, Wharton, and Yale).  It is a culture that prides itself on its own perceived “smartness” and that smartness has no other object, no other referent, no other meaning than making unspeakable sums of money for its own membership by creating fictions for the world to invest in.  

Make no mistake: these elite over-brained and yet—as Ho unfolds the evidence of their mistakes—incompetent and/or criminal narcissists make lots of money.  In recent history, most of it has been engineered at taxpayers expense (think: bailout) and against the interests of promoting a sustainable business environment.  You know what I mean by a “sustainable” business environment, right?  I mean a world in which there are good companies to work for, good jobs available, and those good companies and the people who work for them produce goods and services that help make the world go ‘round and that offer investors a fair return on investment.

It will never happen.  Not as long as Wall Street rules.

Wall Street is not interested in people.  Or companies, except as “financial products.” What Wall Street is interested in is “shareholder value” that can be manipulated by what they can provide: leveraged buyouts, employment insecurity, mergers and acquisitions, and deals that have only one goal:  to make those who make the deals a whole lotta money.

No wonder it is an attractive employment option for those elites, regardless of major (majors don’t matter because, as Ho learns, finance can be taught over a summer).  No wonder the year-long recruitment acculturation process on those four campuses, which itself includes “star treatment,” free meals at five-star restaurants, and many, many parties with lots of free booze and opportunities to evaluate the star’s social skills, has turned many a Ivy-leaguer who told Mumsy and Doodles he or she aspired to be a doctor, or a lawyer, or a teacher into an investment banker or financial analyst.  In fact, thirty years ago 40% of Princeton’s graduates went on to careers in medicine or law.  Today, 40% go into investment banking or finance.

Once a “superstar” (“we only hire superstars”) is brought into the Wall Street culture, she or he is introduced to a kinship network composed entirely of others of their ilk.  

Ever wonder where Donald Trump gets his arrogance?  He is, as it turns out, a graduate of the Wharton School of Business at the University of Pennsylvania (one of the elite four) and a veteran of Wall Street.  So when he makes idiot pronouncements such as “economists aren’t very smart,” or challenges President Obama to show that deserved to gain admittance to Harvard Law School, or says he refuses to shake hands with the hoi poloi, I now understand where that annoying superior attitude, that unabashed belief in his own special status as a “master of the universe” who only cares about money and who openly tells everyone to go to hell, comes from.  He learned it on Wall Street.

But recruitment from an elite institution is only the first cultural step into the Wall Street way of acting.  The second step is acquired during the two years each new hire spends as a grunt, working an average of 110-hours per week with guaranteed overnights every month, for the less than princely sum of $50K.  As one of her informants puts it, “that’s less than you would have made flipping burgers.”  Yeah, but.  But the difference is that after you pass the two-year evaluation, and after you return from Wharton or Harvard for the mandatory MBA, you earn twice that much as salary and up to four times that much in bonuses.  You are, on average, 25 years old.  And at that point you are already working on the huge financial deals that, if you survive the annual hiring/firing frenzy to squeeze out every last dime of profitability for the firm and make Vice President by, say, 30, you are turning over a salary about between $300-$500K with annual bonuses that theoretically have no ceiling.

Of course it’s not easy.  Of course it requires hard work.  In fact, coupled with “smartness” the oft-repeated line about “working hard” is part of the grammar of Wall Street that justifies those high salaries, huge bonuses, and the screwing of everyone—and I do mean everyone—who thinks for a minute that the stock, or the mortgage, or the investments we have are being managed by people who genuinely want to see us do well.  They don’t want to see us do well.  They could care less.  

We might as well be “the help.”  After all, the whole point of our dumb-ass public school lives is to silently go along with, even to support, a system that so clearly oppresses us, even to the point of granting tax breaks for the Wall Street wealthy and bailouts for their “too big to fail” firms.  For really the triumph of Wall Street capitalism—regardless of their clear record of boom and bust, as well as their lustier and lustier appetites for mega-deals and subprime mortgages and leveraged buyouts—is precisely the wholesale buy-in that voters and legislators and congress and even the president gives to their core narrative, which is that they are smarter than we are, they work hard to ensure shareholder value, and they deserve the advantages they are given because as long as they do well, we do well.

Except when we don’t.  Notice I said “we” not “they.”  For no matter how bad it gets for you and me, we don’t have to worry about the welfare of the rich and infamous Wall Street gang.  

Notice anyone jumping out of windows during the last collapse?  No, I didn’t think so.  

Notice anyone going to jail for the crimes that were committed?  No, I didn’t either.  

Just as any culture will place its our survival ahead of any other goal, the culture that is Wall Street will fight against anyone who threatens to strip them of their privileges.  Ho details the biographies of a lot of people she interviewed for this book, and although all of them told of their own ups and downs, they were proud of their skill set, proud of their accomplishments, and so far as I can tell from the evidence provided, none of them regretted a thing.  Which means they never talk about the effects of their deals, the leveraged buyouts that cost thousands of jobs, the mergers and acquisitions that killed American dreams.

But that’s because they don’t have to think about those things.  It’s beneath them.

This is, then, the perfect life for the privileged elite.  If other people get hurt, or lose their jobs and houses, or if someone saw a business they had put heart and soul into for thirty years sold off for no reason other than there was profit in it for someone on Wall Street, well, so what?  Money is the only thing that matters to me.  More importantly, the only thing that matters is me.  It’s the attitude of indifference to others, and especially to other peoples’ suffering, that comes across without fail in these interviews.

Ho traces the change in the narrative that moved Wall Street from a culture that was largely thought to be a relatively boring “caretaker” operation that helped businesses become more efficient, to one completely divorced from caretaking responsibilities and totally dedicated to making money.

That change began with two converging storylines: Ronald Reagan’s presidential fiction and Gordon Gecko’s “Wall Street” truth.  It was “dawn in America” for the real Wall Street’s narrative because with the idea drawn from Gecko that “greed is good” came Reagan’s storyline about the need for deregulation coupled with government is a bad idea.  Together these stories provided a generation of conservative Republicans and their financial supporters with rhetorical fuel and an ongoing electoral fire.  

By the first bust of the 1990s the principle of “(white) boys from elite schools sometimes go a little crazy, but it’s all right if the market rebounds” was part of an emerging master narrative that made a heroic archetype out of a money culture on steroids.  And that lured most Americans into becoming investors.  

Under the ideological spell of this master narrative, Wall Street “naturalized” an entire discourse of free markets, globalization, and shareholder value.  Ho meticulously charts the evolution of each of these terms and explains each one of them as essentially a shell game.  Take “globalization,” for example:

The dominance of finance capitalism in the economy of the United States and its influence worldwide depend on the work of investment bankers in claiming and promoting ‘the global.’ … [I]n conjunction with the shareholder revolution, hypercapitalist temporality, and the strategy of no strategy, [the global] is crucial to fully understanding Wall Street’s market making.  Their hyping of their own superior capabilities and financial products breed frenzy and confidence in their latest offerings, which in turn globalize their spread.  Far from being immune, investment banks are susceptible to their own global boasting (which is, after all, based on their self-representations as smart and market savvy).  This self-confidence, when coupled with an institutional imperative to ‘milk the present,’ helps to create a culture of leverage where they literally double down on their latest, most profitable financial instrument.  This gamble betrays competing aspects of their cultural milieu: both a realization that a strategy of exponential leverage and the single-minded pursuit of deals is necessary to extract massive short-term profits before the boom turns to bust, and a belief in their own capabilities to outsmart and outlast the volatile market they helped to generate.  Apprehending how investment banks project their hopes and dreams onto the global, and how they use the global to hype and spread their products, illuminates why and how they make the world (pp. 296-297).

Although Ho doesn’t chart the course of the recent boom and bust cycles against the high cost of waging war, I couldn’t help but do it myself.  When the bubble burst on the high tech/global markets fiction Wall Street had created as a short-term profit strategy and before most of us could understand what was happening to our suddenly tanked investments, we quickly found ourselves distracted by 9/11 and then by the claim—entirely false but supported by Dick Cheney, et. al.,  and Wall Street and necessary if real money was to be made and future elections guaranteed—of WMDs in Iraq.  

In other words, we were distracted from the crimes being perpetrated by Wall Street on the savings, the mortgages, and the retirement plans of the rest of us.  While we waged a “global war on terror” (note the “global” irony) then two “enduring” wars that essentially cost the taxpayers not a dime and that drove our national debt into the stratosphere, we learned too late that war profits were being earned by investors who had the most to lose if we brought the troops home—not just the war profiteers such as Halliburton, Xe, arms and munitions manufacturers, but also those of us who invested in the stock market.  Wall Street’s narrative made dupes and fools of us all.

Then Lehman Brothers failed.  And in the next couple of months, Wall Street came as close as it has ever come to collapse.  But with the rise of “too big to fail” rhetoric coupled with the fact that most Americans—through retirement and pension plans are now stock holders—and an entrenched and wealthy culture of Wall Street smartness that compromised leaders in both parties who themselves depend on the largess of Wall Street for their own reelection, the only trajectory this narrative could take is the one it did take, which was straight from near collapse to business as usual, leaving you and me to pick up the tab.

Is that bile rising up in the back of your throat?  Maybe it was something you ate.  Or maybe it is what you are coming to realize—much as I did—by connecting these dots to the present mess.

In sum:  We are completely and incompetently ruled by an elite group of investment bankers who profits from our suffering and who does not give a damn about anything beyond maintaining and expanding their own wealth and privilege.  

We go to work in organizations that are valued solely for the purpose of their worth as a “financial product” to be manipulated on world markets, without regard for the welfare of the company or those who work for it.  

We endure a divisive political environment, created by and for Wall Street in order to ensure that only those candidates they endorse and that support their ends are elected, because in effect, both politics and politicians are financial products too.  

And we find ourselves in overwhelming national debt, deadlocked over what to do about it; with unprecedented rates of home foreclosures, high unemployment, and no jobs for college graduates; diminishing retirement balances for seniors who also now face reductions in their health care; cutbacks in public education, public services, and the rights of those who dare organize unions or collectively bargain or even publish op-ed pieces that are perceived to be against the interests of the rich; and so on.

Are you angry yet?  Karen Ho makes it clear enough who is to blame.  I’ve never known an ethnography to inspire a revolution, but perhaps this one can.

Read this book.  Then let’s collectively rise up out of our comfortable reading chairs and do something uncomfortable about it.

Originally posted to Dr Bud on Sun May 01, 2011 at 05:50 AM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, Income Inequality Kos, and Readers and Book Lovers.

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